I have installed WPMU in localhost:8080/blogs/, installation worked fine.
When pointing to localhost:8080/blogs/, i get a redirect loop to wp-signup.php, because of this statement (line 9)
if( $current_blog->domain != $current_site->domain ) {
header( "Location: http://" . $current_site->domain . $current_site->path . "wp-signup.php" );
die();
}
because $current_blog->domain == ""
My wp-config.php includes:
define('VHOST', 'no');
$base = '/blogs/';